After a two-day meeting, the Fed's Open Market Committee issued a statement that was largely identical to the one it released after its June meeting.

The central bank said economic activity "decelerated" and reiterated its former guidance, forecasting it is likely to hold interest rates near "exceptionally low levels" at least through late 2014.

Some investors had expected the Fed to say it would hold interest rates near zero into 2015. But hopes for more aggressive stimulus measures had been scaled back this week, said Quincy Krosby, market strategist with Prudential Financial in Newark, N.J.

"That's why there wasn't a more visceral reaction in the market," Krosby said.

The Fed announcement came ahead of the European Central Bank's highly-anticipated meeting in Frankfurt on Thursday.

Knight said in a statement that "a technology issue" occurred in its market-making unit involving about 150 stocks. The firm said it notified clients earlier Wednesday that orders should be rerouted as it reviews the matter internally.

Shares of Knight fell more than 30%.

The New York Stock Exchange is currently reviewing trades in 140 ticker symbols between 9:30 a.m. ET and 10:15 a.m. ET.

Wednesday's mishap "was a disaster," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams. "This is not good for investor confidence. It's like the 'flash crash' all over again."

The gains came despite a spate of weak reports on manufacturing activity. The Markit Final Eurozone Manufacturing PMI fell to 44 in July, a more than three-year low but roughly in line with forecasts. Manufacturing activity in the United Kingdom and Italy also slowed in July.

There were conflicting signals about manufacturing activity in China in July. HSBC's PMI for the month came in at 49.3, up from 48.2 in June. While the slowdown in activity eased a bit, a reading below 50 still indicates a contraction.

However, figures from the government showed that manufacturing in China expanded slightly during the month, but slowed from June. The China Federation of Logistics and Purchasing's PMI came in at 50.1 in July, down from 50.2.